INSURANCE/PROFILE\\\


Insurance Do bigger ships mean a bigger risk?


It ain’t necessarily so, says TT Club’s Peregrine Storrs-Fox.


Container shipping is, after half a century, remarkably resilient and successful in operational terms – if not necessarily profitable. Mankind, particularly in the developed world, takes it for granted that it is possible to buy exotic fresh produce that has travelled weeks from another continent, or pick up a bargain in the latest electronic gadgetry that is most likely to have been manufactured in Asia. The movement of hundreds of millions


of containers each year with a relatively low ‘failure’ rate is testament not only to the original pioneers of the unit load shipping industry, but also to those who have incrementally improved processes, ensuring that increasingly varied cargo can be transported safely and securely. Formidable foundations were set in the early days, such as the International Convention for Safe Containers (CSC), which has, with only modest amendment, provided guidance for the structural control of freight containers. Such foundations have been supplemented over the decades by a plethora of national and international


regulations on how


cargo should be packed in containers, and then loaded and secured on ships – work that necessarily continues. Container shipping has had its share of maritime incidents over the last decade.


These demonstrate the challenges the industry faces as it seeks to match the appetite for goods to be transported against the need for cost efficiency, most readily epitomised by the increase in individual ship capacity. The October 2011 grounding of the Rena on the Astrolabe Reef off New Zealand led to a complex salvage operation in adverse sea conditions and a sensitive marine environment. The logistical challenges following


any incident could be typified by ‘Emma Maersk’, which suffered a flooded engine room in the Suez Canal in February 2013. Most ports have ‘dwell’ time for containers of 2-4 days and do not anticipate a mass influx to be handled and stored pending onward movement. However, in this instance 13,000 entirely undamaged containers were discharged into the unsuspecting terminal. While such incidents are by nature


more to do with the ship itself – and therefore any kind of tonnage is vulnerable – the ‘MSC Flaminia’ incident in July 2012 highlights what can be termed ‘adjacency’. Cargo on board the ship caught fire, claiming three lives and forcing the ship to be abandoned in the Atlantic, about 1,000 nautical miles from the English coast. Although the fire was brought under control, it was almost


two months before the ship was brought safely to a berth – itself indicating the longstanding international dilemma over ports of refuge. It took a further six months for all the cargo to be discharged in an environmentally sensitive fashion. The precise cause of the fire is now


subject to litigation, although the German Maritime Administration issued a report on its investigations in early 2014. Whatever is ultimately established, there is a simple truism that a single consignment, package or drum, packed in a container and loaded on board a ship has the potential to wreak havoc. This is the adjacency risk that has continued to fuel the industry with initiatives such as the liner operators’ CINS (Cargo Incident Notification System) as well as the development of the CTU Code (IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units). The latter is nearing final UN approval,


following which the challenge will be to ensure that everyone involved in packing cargo and consigning it


to the supply


chain understands and satisfies their responsibilities. The simplicity of the unit load remains one of its most intractable risks – what is in the CTU and how it is packed is essentially invisible to those charged with handling and moving the ubiquitous box.


Four of a kind in Southampton


Illustrating the trend to bigger ships, DP World Southampton recently


hosted four


Hapag- Lloyd sister ships simultaneously on its deep- sea berths - the first time in its history that four vessels from the same line berthed at the same time. Three were the new ultra


generation large


container ships with nominal capacity of more than 13,000teu. The Ludwigshafen Express, New York Express and Stuttgart Express were all making their first port of call on a rotation in Europe and later went on to call at Le Havre and Antwerp. The Hong Kong Express was making her last call of its European rotation before sailing to Singapore. Hapag-Lloyd is part of the


G6 shipping alliance and, after the planned merger with Chile’s CSAV, will be the fourth largest shipping line in the world.


Issue 8 2014 - Freight Business Journal


Questions, questions


35


Justin Kirkhope, project manager – National


Transport Support Manager at Co-operative Food


Q. What was your first job? (In any industry, not necessarily freight or transport).


A. Working in the Summer and Christmas holidays as a temporary sales assistant at the Fenwick department store in Newcastle.


Q. How did you first get involved in the freight industry?


A. While I was at university, I studied Logistics as part of the final year of my degree. My course tutor at the time was Prof Dr Alan McKinnon, a well respected expert in the field of Logistics. He encouraged me to carry out a final year dissertation on Fuel Efficiency in Road Haulage.


Q. Did you plan to get involved in freight – did you have much notion of the industry before you got involved with it?


A. As a youngster, I had always had a passing interest in anything that moved, cars, planes, trains, lorries, but I hadn’t thought seriously about freight as a career until my final year at University.


Q. What has been the biggest achievement or high point of your career in the freight industry?


A. Probably modelling and delivering successful transport implementations at each of the Co-operative Food’s new DC network over the last 8-9 years.


Q. Any low point(s)? A. I still remember vividly in my early days as a Traffic Manager in North East England, taking on some new fresh produce business which in honesty we weren’t ready for at the time. There were a few sleepless night, and we got through it in the end - but in this industry, to our customers our reputation is often only as good as the last delivery we make.


Q. If you had the undivided attention of the Secretary of State for Transport for ten minutes, what would you tell him?


A. If you are serious about freight modal shift, please make the incentives as transparent as possible in this area, and protected as a long term arrangement. The recent move to freeze the duty differential between Diesel fuel and CNG until 2024 is welcome in allowing a longer term approach to investment decisions.


Q. What is the biggest challenge facing the freight industry today? A. Being able to continue to improve efficiency from a cost and resource point of view in a climate of rising fuel prices, and declining qualified driver resource.


Q. Where do you see the freight industry in 12 months’ time? A. It is going to get even tougher on the cost, legislation and driver resource fronts.


Q...and in 50 years time? A. Who knows what new technology will add to the industry in five decades’ time, but I’m guessing more automation together with innovation on alternative fuels. Hopefully smarter packaging will reduce the bulk, if not the weight, of what we are storing and carrying, allowing greater efficiency on individual delivery loads and in the warehouse.


Q. When you meet people from outside the industry, how easy is it to explain to them what you do?


A. As I am frequently told by people outside our industry, in freight we simply have to move boxes from one place to another….


Q. How do you relax away from work? A. Spending quality time with my wife and two children, I also enjoy working on, and occasionally driving, my classic BMW when I get the opportunity.


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